By Rob SpiegelE-Commerce Times
12/30/10 9:26 AM PT The boom has fallen on Winifred Jiau, a California consultant accused by federal investigators of selling financial information on a couple of tech firms for the purpose of insider trading. Jiau faces a potential 20 years in prison, along with a $5 million fine, for committing securities fraud, the more serious of the two charges brought against her.
Learn how the top retailers create sites and apps that sell.
Read our free whitepaper on best practices for mobile, ecommerce, and sites used by companies like Google, Microsoft, AOL, and more.
The investigation was conducted by the office of U.S. Attorney Preet Bharara, Southern District of New York. Between 2006 and December 2008, Jiau obtained inside information, including detailed financial earnings, about multiple publicly traded companies including Nvidia (Nasdaq: NVDA) and Marvell, Bharara's office discovered. Jiau sold that information to portfolio managers at hedge funds.
The hedge funds then traded stock based on the information provided by Jiau. In return, the hedge funds paid Jiau over US$200,000 over the two-year period. Payments were made through an expert networking firm that purported to provide "institutional money managers and analysts with market intelligence" through a "global advisory team of experts," according to Bharara's office.
Jiau has been charged with one count of conspiracy to commit securities fraud (count one) and one count of securities fraud (count two). On the first count, Jiau faces a potential penalty of five years in prison and a fine of $250,000 or twice the gross gain or loss from the offense; count two carries a maximum potential penalty of 20 years in prison and a maximum fine of $5 million.
One of the hedge funds netted profits of more than $820,000 from the trades in Marvell securities.
Council and chief public information officer for Bharara's office, Ellen Davis, told the E-Commerce Times the office had no comment beyond its press release.
During the two-year period named by Bharara, Jiau was employed as a consultant by Primary Global Research, an expert-network firm in Mountain View, Calif.
"Winifred Jiau served as an expert consultant with Primary Global Research from September 2006 through December 2008, at which time the relationship was ended," Marilyn Gerber, a spokesperson for Primary Global Research, told the E-Commerce Times. "The company has no further comment."
Jiau also had a working relationship with Nvidia.
"She worked as a contractor, rather than an employee, and left about a year ago," Robert Sherbin, head of corporate communications at Nvidia, told the E-Commerce Times.
Another set of arrests on December 16 resulted from investigations under the direction of Bharara's office. Four employees from tech firms were arrested for insider trading, including James Fleishman, the VP of marketing from Primary Global Research.
The tech employees who were nabbed for insider trading had been employed at Dell (Nasdaq: DELL), Advanced Micro Devices (NYSE: AMD) and Flextronics, a contract manufacturer for Apple (Nasdaq: AAPL) that had early information on the production quantities of the iPhone. The secrets traded included advance information on earnings reports as well as information on emerging products.
The way Bharara's office described the system of information trading is that Primary Global Research would recruit employees from tech firms and pay them for delivering non-public corporate data, primarily early views into quarterly earnings results, to the firm's hedge fund clients. These employees would be paid to reveal inside information from their employers.
The four who were arrested on December 16 were collectively paid more than $400,000 merely to participate in phone calls with Primary Global Research clients.
The arrest of Jiau and the earlier arrests of the four tech company employees and Fleishman are part of a larger investigation run by Bharara's office. The case was launched in coordination with President Obama's Financial Fraud Enforcement Task Force. Bharara serves on the group as cochair of the Securities and Commodities Fraud Working Group. 
Print Version 
E-Mail Article 
Reprints 
More by Rob SpiegelNext Article in Wall Street
SEC Poking Around in Private Trading of Social SharesDecember 29, 2010
Some of the most visible tech companies -- Facebook, LinkedIn, Twitter and Zynga -- are privately held, but shares owned by former employees and investors are changing hands in a market that appears to be rapidly heating up. The SEC has taken notice, reportedly checking in on the firms to find out just how large their investor populations have become, among other matters. More by Rob Spiegel
Qualcomm Tucks Atheros Into Its ArsenalJanuary 05, 2011
Qualcomm's acquisition of WiFi technology company Atheros is drawing generally positive reactions, since it will be able to maintain its core strengths while advancing into new markets. There are a couple of companies that might not be so sanguine about the deal. Broadcom will begin feeling the heat, and Texas Instruments could also break a sweat. Motorola Is Dead - Long Live the MotorolasJanuary 04, 2011
Investors are cheery now that Motorola has completed its long-anticipated split into two separate, more-focused firms, but there's still some nostalgia over the passing of the 83-year-old corporate titan. "In some ways it's sad," remarked In-Stat analyst Allen Nogee. "The big Motorola of the past is gone, but the truth is it has faded away slowly over the last several years." Goldman Gives Facebook a $450M LiftJanuary 03, 2011
Facebook is gearing up to compete in the major leagues, and it just got a strong helping hand from Goldman Sachs, to the tune of $450 million. Goldman partner Digital Sky poured another $50 million into the social network, which brings its valuation to a cool $50 billion. "There's a feeding frenzy around this property," noted tech analyst Rob Enderle. "Facebook has to grow very quickly."
0 komentar:
Posting Komentar